Asset managers have reduced their engagement with sustainability-linked loans (SLLs) in 2023 due to increased reporting requirements and costs. The proportion of European leveraged loans with sustainability features dropped significantly, and the size of SLLs decreased by nearly 50% compared to 2022. Concerns over the credibility and complexity of SLLs, including issues like 'sustainability washing' and inadequate KPIs, have contributed to this decline. Despite these challenges, the ESG-linked loan market is still seen as a growth area, with significant global lending volumes reported by private debt manager Alcentra.

UK investors are increasingly holding cash, matching the number invested in actively-managed funds, in response to higher interest rates and geopolitical uncertainty. The Schroders Global Investor Study 2023, which surveyed over 23,000 people across 33 locations, revealed that UK investors have high return expectations, with some turning to cryptocurrencies and higher risk investments to meet their goals. The majority are adjusting their strategies due to inflation and interest rates, with a shift towards sustainable funds noted, as performance concerns decrease.

Morgan Stanley is reportedly considering the creation of a new private credit fund, potentially allocating $1bn to $2bn of its balance sheet to the strategy, alongside capital from external investors. The fund aims to raise $4bn to $5bn from limited partners. The bank may focus on making large senior-secured, performing unitranche loans to borrowers. No final decisions have been made, and Morgan Stanley has not commented on the matter.

Invest & Fund has cautioned against a rapid decline in interest rates, suggesting it could lead to a liquidity trap with excessive retail and business borrowing, potentially hampering efforts to control inflation. The residential development lending platform anticipates a decrease in borrowing costs in the alternative lending market, leading to increased activity. It also foresees governmental support for the development sector, especially with an upcoming General Election, and predicts a surge in private and institutional investment in UK homebuilding. However, the impact on peer-to-peer lenders is yet to be determined.

Consumer loan demand is projected to remain high in 2024 despite easing inflation and rising wages, according to Hive5. The cost-of-living crisis is expected to persist, making consumer loans a stabilizing investment. Hive5 advises caution due to a potential recession and suggests cybersecurity investments as a strong option. The S&P 500's recent performance is noted, with corporations adapting to central bank policy changes. Maintaining a balanced portfolio is emphasized to mitigate risks.

T. Rowe Price and Oak Hill Advisors have launched the T. Rowe Price OHA Select Private Credit Fund (OCREDIT) on the iCapital Marketplace, making it accessible to financial advisers. The fund, established as a non-traded, perpetual-life business development company in the US, focuses on senior secured loans to larger companies in North America. T. Rowe Price's acquisition of Oak Hill Advisors in 2021 aimed to enhance its private markets expertise. iCapital, a fintech platform, facilitates access to alternative investment funds for a broader investor base.

Private credit is gaining traction among investors and asset managers due to higher returns in a high-interest-rate environment. Private debt funds have outperformed buyout funds, with floating rate loans benefiting from rising rates. Cambridge Associates anticipates strong performance from direct lending and European private credit funds. However, S&P Global Ratings warns of a potential slowdown in market growth due to interest rate uncertainties. Innovations in the European market, such as ELTIF 2.0 vehicles, aim to provide greater access to SMEs for retail and institutional investors. Increased collaboration between private debt players and traditional banks is expected.

Swaper, a peer-to-peer lending platform, has established a new subsidiary, SW Finance, to launch a business loan product in response to upcoming Polish regulations prohibiting lenders from borrowing funds from investors online. SW Finance, licensed by The Financial Intelligence Unit Estonia, will support Wandoo Finance Group's lending operations and offer business loans with a 14% interest rate and a 30-day term. Swaper is also working to onboard a Romanian loan originator, expanding its loan supply and minimizing cash drag for users.

The Financial Conduct Authority (FCA) has concluded its investigation into the promoters of Blackmore mini-bonds, NCM Fund Services and Northern Provident Investments, and will not take enforcement action. The investigation, which involved reviewing 8,000 documents and 7,330 hours of work, found that the financial promotions were largely accurate and contained relevant risk warnings. Blackmore Bond, which raised millions between 2016 and 2018, went into administration in April 2020, with investors being told they will likely not receive any money back. The FCA has admitted to past human errors in supervision and is addressing 26 outstanding complaints alleging failure to protect investors. Therese Chambers of the FCA emphasized the importance of thorough and fair investigations and the necessity of sufficient evidence to justify enforcement action.

easyMoney's research suggests that the Innovative Finance ISA (IFISA) is one of the best investment options, with an average annual yield of 7.28%, closely following the returns from gold and silver. IFISAs allow investors to engage in peer-to-peer lending or crowdfunding while benefiting from tax-free ISA allowances. In comparison, cash ISAs and fixed-rate bonds offer lower average growth. easyMoney CEO Jason Ferrando recommends IFISAs as a realistic investment for most people, especially in planning for financial strains such as Christmas expenses. Interest in IFISAs has increased by 150% this year, and the UK government has introduced new rules to make the product more appealing.